Saga joins rush to Gibraltar

OVER-fifties holiday and financial services group Saga is the latest insurer to head for Gibraltar, lured by less stringent regulations in Europe. It follows rival motor insurers Admiral and Zenith.

The trend has raised fears about the quality of cover offered to UK policyholders as the solvency requirements abroad may be lower.

But Saga, which sells other insurers' cover to one million UK drivers, insists it is making the move only because offshore regulations mean it can sell its own insurance.

Andrew Goodsell, managing director of Saga, said: 'The reason for going to Gibraltar is purely a matter of speed.

'We can be authorised to set up a new company by the end of the year. We couldn't do it that quickly if we set up a British company.'

Individual policyholders in the UK will remain covered by the Financial Compensation Scheme, which will pay out 90% of claims outstanding if an insurer - wherever it is based - goes bust. The scheme also compensates for premiums paid for future cover.